Hawk’s Scan Sentry Report October 8
Few would argue that we are currently in the upper reaches of a mature bull market. This Fed fueled market has been making higher lows and higher highs since Obama took office in 2009 and is now approaching the historical peaks of rallies which ended in February 2000 and October 2007. It’s amazing what practically free money will do for a stock market. At this point we would only need a 7% rise in the S&P to meet those historical highs which create our next significant resistance level at around 1560. As I have noted several times this year in this blog, I expect to see this market test those levels before the end of this year. If we do reach the 1560 level I will then expect to see a lot of profit taking. I don’t know how much ground we will cover toward that upside target this week since we are currently testing the most recent interim highs attained several weeks ago. This, of course, creates a bit of resistance. If we fail in this attempt to break through our current resistance level of 1468 we are likely to see another pullback into the 1420’s or perhaps back to around 1400 before the bulls make another charge toward new highs. In my short term trading endeavors I hope to be ready for either scenario this week.
It is vitally important to be prepared to ride this thing up down and/or sideways because, like a rodeo bull, this market will do its best to buck and kick in every direction in order to throw you off. Ask any rodeo cowboy, the trick is to endeavor to become one with the raging animal you are riding. That’s why it is especially important to look at both long and short trading possibilities in order to be ready for the unforeseeable gyrations of this bull market. Below are some charts of some of the symbols that I have identified this week for my weekly trading watch list both long and short. Each contains a little explanation of the analysis visible on the chart. If you have any questions about the indicators on these charts please follow this link to a legend describing these tools.
(A nice breakout above the down trendline accompanied by a bullish Pullback 23. All three Trenders of the Triple Trender are now bullish. Note that Radar1 Fear/Greed is starting to make higher highs as well. )
May the trend be with you,
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